Strategic Compensation: A Human Resource Management Approach, 9/e

Designing Sales Incentive Compensation Plans

1. 3 Summarize the features of sales compensation plan design.

Compensation programs for salespeople rely on incentives.²⁰ Sales compensation programs can help businesses meet their objectives by aligning the financial self-interest of sales professionals with the company’s marketing objectives.²¹ By extension, sales compensation programs can help companies achieve strategic objectives by linking sales professionals’ compensation to fulfilling customer needs or other marketing objectives (e.g., increasing market share). Thus, sales compensation plans derive their objectives more or less directly from strategic marketing objectives, which, in turn, are derived from company competitive strategy. Particular ...